The Alaska-China connection.

• Author: Baker, Allen

With its huge economy and growing standard of living, will China become the next big market for Alaska's exports? This in-depth analysis offers a glimpse of what the 49th state can offer the Far East.

Shanghai, China - It's a market of 1.2 billion people with an economic growth rate that's the envy of other nations. New buildings are going up on every other block in China's largest city - and elsewhere in this bustling country.

But recent headlines raise questions about trading in China: McDonald's was kicked out of its prime spot in Beijing despite a 20-year lease. Lehman Brothers sued two Chinese state companies that refused to pay their debts after losses in currency trading. Conflicts between the United States and China could lead to a trade war between the two nations that now do nearly $50 billion a year in trade with each other. Is this a place for Alaskans to do business?

The answer is yes, but with a long list of cautions. While Alaskans have long had commercial ties with the Japanese businesses that buy a huge chunk of Alaska's fish harvest and interest in Russian development has been strong, few northern businesses have ventured further south into China.

Alaskan exports to China amounted to just $58 million in 1993, says Bennett Brooks of the Governor's Office of International Trade. The top export was about $15 million worth of fish (compared to $900 million shipped to Japan). Alaska also shipped about $15 million in petroleum and about $11 million in wood products to China. For Hong Kong, which has a huge market of relatively affluent people, the total export volume from Alaska was just $3 million.

Fish Forecast

Alaska's big export is fish. And Chinese, especially in the south, eat a lot of fish. But Alaskans haven't put a lot of marketing effort into the region, while other countries are carving their niches in the market.

"Japan's a billion-dollar market for salmon, but I don't think they've looked at the market down here," says LaVerne Brabant, who works in the agricultural export office of the U.S. Department of Commerce in Hong Kong. "The price competition from Norway is sharp - but there is business here.

"There is product moving," Brabant says. "There is seafood coming in from all over - Australia, India..."

That sentiment was echoed by Blaine Porter, a top U.S. official who's familiar with Alaska. A former employee of Anchorage Mayor George Sullivan and head of the U.S. Commerce Department's trade office in Anchorage...